Store of value
 | This article needs additional citations for verification. (December 2006) |
A recognized form of exchange can be a form of money or currency, a commodity like gold, or financial capital. To act as a store of value, these forms must be able to be saved and retrieved at a later time, and be predictably useful when retrieved.
Storage of value is one of several distinct functions of money. The other functions are the standard of deferred payment, which requires acceptability to parties owed a debt, and the unit of account, which requires fungibility so accounts in any amount can be readily settled. It is also distinct from the medium of exchange function which requires durability when used in trade and to minimize fraud opportunities.[1]
With money being a storage of value was the start of monetary inflation cycles where the Federal Reserve bank creates new money to dilute the value of money currently in the system, creating an over abundance of money causing market goods and services to rise in price by 4% to 8% per year.
Alternatives stores of value
- real estate - ownership in actual deeds in protectible controllable land.
- Education, Ability, keenness, problem solving capability in mental processes, adaptability, a high performance brain can defend wealth and produce more wealth than someone without an education.
- Possession of superior DNA, quality of skin, symmetry of body, beauty, 20/20 vision, straight teeth, fully adapted autoimmune system, lack of genetic problems and conditions, heritage, men and women will exchange value to acquire this.
- precious metals - ownership in gold, silver, platinum, copper, rhodium, aluminum, nickel, lithium, silicon, etc.
- precious stones, ancient artifacts, ancient coinage.
- Owning the option to acquire, or having an SSN and citizenship in a 1st world nation (which changes) has value in itself (labor and value can be exchanged to help people from 3rd world into 1st world, through marriage).
- collectibles, e.g. original art by a famous artist or antiques.
- livestock ownership and control of Live Hogs, Fish, Cows, Chickens. (see African currency)
- stock ownership in a company which is a system to exchange human labor for value.
- Equipment, backhoes, nail guns, roofing tiles, plywood, concrete, nails, generators, Oil, Fuel, bricks, sheetrock, solar panels, chainsaws, tubing, wiring, switches, furnature.
While these items may be inconvenient to trade daily or store, and may vary in value quite significantly, they rarely or never lose all value. This is the point of any store of value, to impose a natural risk management simply due to inherent stable demand for the underlying asset. It need not be a capital asset at all, merely have economic value that is not known to disappear even in the worst situation. In principle, this could be true of any industrial commodity, but gold and precious metals are generally favored because of their demand and rarity in nature, which reduces the risk of devaluation associated with increased production and supply.
See also
References
External links
- Linguistic and Commodity Exchanges by Elmer G. Wiens. Examines the structural differences between barter and monetary commodity exchanges and oral and written linguistic exchanges.